Product Challenge – consultancy projects for a company

 Create a new product or service for real or non-existing brands

 Exists in one country but not in another
 Suggest a campaign on how to launch a product
 Presentation + consultancy report

THE EVOLUTION OF MARKETING

 How did marketing changed for the last 50 years?
o Social media, celebrity influence – promotions
o Big data – we can predict what people are going to like or not
o Internet – search became easier, reach out to many more people and consumers
have access to more products
o Communication has become more intense

Before WWII, demand was higher than supply – so companies knew they were gonna sell all you
produce anyway, no need for differentiation. Nowadays, supply is way higher than demand,
markets are saturated so important for marketeer to know the needs and desires of consumers to
satisfy them in an efficient way (need for persuasion).

Consumers in the XXI Century are digital consumers – more than a half of the world’s population is
connected to the internet. We are living in an era of globalization of products and consumers (I can
order goods from US, China,… and Chinese companies can target consumers in the other half of the
world if they want to).

With the digitalization of consuming, there are new technologies and new discoveries : search
engines, ads on television, ads on social media,,…..

How is a digital consumer different from conventional consumers? Examples, suggestions:

 Conventional know what they want to buy but digital consumers wait for the ads they see
and impulsively buy.
 Digital consumers are more thorough and watch reviews and do their research but
conventional just go to a shop and choose from the offer there.

Consumers online and offline

 Many consumer behavior principles that describe offline buyer behavior also apply to online
behavior. The basic motivation is more less the same. The ways and channels are different
but the drivers are the same

o Scarcity (exclusive, limited edition)

• EX: jewellery – if everybody wears it either you don’t want to buy it because
everybody has them or you want to buy it because its cool to wear it. The
same campaign may have completely different affect on people (negative
and positive)
o Social proof / Popularity
o Liking
o Authority
o Consistency
Perception (I like it more for X reason) leads to an action (buy it and recommend it to my friends).
This then translates to a financial output for the company (Customer equity, firm value, profitability)
Why study consumer behaviour?

 Making correct predictions on how consumers respond to marketing actions can generate €€
€! Marketers need to know how consumers make decisions
 Economic model of human decision making
 People are often NOT “rational” decision makers
o Limited cognitive capacities: heuristics, rules of thumb
o Emotions and feelings
o Social influences
We as consumers are not always rational. We don’t always optimize – take time and days to compare
all the options etc. We are led by our emotions, social influence, our own experience.

Irrational consumer

 If there are many ppl in a restaurant, we go there because it must be good – we rely on other
people, and their opinions, others know better
 Ppl who don’t want to drink Corona beer because of corona virus
 How brand image can influence perceptions: Taste is subjective (I either like it or not).
Experiment with beers – brand image makes a difference

New Trends & New Ideas

 What is a trend: the idea is to be the first one to do / create something so try to identify the
trend
 Companies try to predict what will be the new trend – how things will change in the
observable future
 The Fundamental Trend Elements:
o DRIVERS OF CHANGE : There are no trends without change. Analyse change is at the
core of trend forecasting in order to identify novel and better ways to service
consumers’ needs. (technology, environment)
o INNOVATIONS Innovations are not trends, but examples of how a trend exists. On-
trend innovations are those that hit the sweet spot and cater consumers’ needs
while anticipating or responding to external change
o BASIC NEEDS Trends are ultimately rooted in our basic, fundamental, rarely-if-ever-
changing human needs, wants and desires. Identifying underlying human needs is
central to spotting and/or understanding any consumer trend.
How can companies identify a new trend?

 An existing trend in other countries and introduce it in my own country

 A group of people do the same thing, go in the same direction  build a product based on
that
 From negative feedback (ppl complain about a certain problem and so we try to solve it)

 Trends are patterns or anomalies that can persuade consumers to adopt new ways of doing
things or expressing themselves.

 To detect emerging trends and shifts, practical techniques and processes are required, as
well as a sensitivity to all the aspects of the society approach with an open, untainted,
analytical, and inquiring mind.

 Trend forecasters focus their activity on identifying new “patterns”, “weak signals”,
“anomalies”, or “disruptions” at their earliest stages.

 They observe Innovators or Early Adopters across virtual and real realms to identify points
of tension, or newness between what people want and what is currently available

• WEAK SIGNAL: anomaly that is detected because it represents core values or attributes that,
for most mainstream organisations, are overlooked because they are vague and without
purpose. They are random, disconnected and could be surreal. They become meaningful
when organised in clusters across industries

• CULTURAL BRAILING: term created by the trend forecaster Faith Popcorn (BrainReserve) to
detect and track changes iín the way consumers live. It refers to the process of sampling and
sensing change – feeling, smelling, tasting, experience

• HORIZON SCANNING: More organised, structured and contextualised approach to detect

shifts in our social, technological. Economic, environmental, political, legal, or ethical
landscape (STAAPLE)

Evaluating trends for opportunity: Trend Maturity – an example

 Temporary Retail: pop – up store

When we think about trends – who are the innovators? What are the themes? In what country?

Emerging Societal Trends

 Just in time life – people like making decisions based on real-time information without much
planning (rent a scooter, without planning, if you fancy it right now you just do it)
 Quality of life – Slow food, opposite of fast food, restaurants where you can relax, take your
time, there is no hustle. In search of "enoughness" - Consumers are increasingly adopting
simpler life-styles marked by fewer material possessions and an increasing concern about
quality of life.
o Guinness: turning a negative aspect into a positive one (waiting for the beers foam to
come down)
 Sharing and have a benefit from it: Uber, Airbnb, Blablacar
  CSR Examples (corporate social responsibility)
o IBM UK: Reinventing Education Partnership program Interactions and sharing of
knowledge through a web-based technology - the “Learning Village” software. AVON:
Breast cancer crusade
o Google : – Its Google Green is a corporate effort to use resources efficiently and
support renewable power.
o Dutch railway: since 2017, all trains on sustainable energy (wind farms)
o Haagen Dazs – honeybee preservation
 Dialog and Co-creation: consumers can suggest some ideas to the company – this became
possible because of the dialog (became easier now with internet and social media).
 Rethiking Marketing Strategy:
o From Selling the brand to Managing the customer: co-creation and individualization.
Nike was one of the first one who offers mass customisation (go to Nike webpage
and create your own design of shoes)
o Emerging platforms: Idea Contest (IdeaStorm) : you have an idea and the company
turns it into reality (“bring back XX laptop”).
o Co-creation: using platforms to create new trends, new ideas. Unilever was the first
one to break its long-term relationship with marketing agency Lowe and Partners –
instead they ran a crowdsourcing competition --- fast, efficient, cheap and turned
into a success (the product)
 The competition attracted over 1200 entries and netted its winners a
$10,000 cash prize. 10k for a company such as Unilever is nothing
 The result was a successful and innovative campaign that reduced Unilever's
costs by nearly 60% of its regular marketing budget.
 Transparent consumers: There is more information about consumers available to product
managers now than ever before.
o Big data vs Small data – is big data always better? Depends on the organization –a
small bakery in a small town doesn’t need the big data because it’s not relevant (only
what kind of bread ppl eat and how much and the day of the week)
o However a huge international company needs to know huge quantities of data. Uber:
where you are, where you’re going and how comfortable you want to be.
o Netflix: uses big data to suggest the films and series they could like to keep us still
connected with the brand and not to let us go. A way to target their costumers and
make ppl attracted. What types of movie, whether we stopped watching something
and why probably, whether we rewatched some series or film
o Adidas: designed a shoe with a chip that saves data (how fast you run, how was your
performance compared to last time,…)

4. CB and Pandemics: The End/Start?

 During COVID lockdowns even the generations that were afraid of buying online had
overcome their fear
 Communication changed : companies that make emphasis on the positive stuff are preferred,
personalised communication, empathetic messages. Address customers by their first name
 Consumers switched to online (e.g., social media, retailers, food)
 Consumers overcame their fears (e.g., online payments)
 Consumers became more engaged with social media
  Consumers search for more online entertainment
 Cashless culture
  Companies should invest in online presence and communication

Covid and Communication

 Make communication and the dialogue with clients easier

 Understand fears of your clients and offer a solution (e.g., Amazon).
 Stay in touch with clients. Show that you care.
 Be positive! Promotion focus! (“You can do! And we will help you!”)
 Show what is available now (instead of what is not)
 Make personalized communication (e.g., a note on delivery “Thank you for being with us!”)
 Forget about abstract communication! Be specific!
 Don’t just talk but show what you do and how

17/09/2021

1. What is product?
 Physical produtct
 Service
 Events
 People
 Ideas
 Places

Distinction between pure good /tangible thing/ and pure service (non tangible)

Most products are commbintaions of goods and services

 Restaurant
 Manicure

There are various levels to products:

 How? Technologies
 What? Functions
 Why? Performance

How can we compare diff products? EX bottle

 Compare the size, the weight, thermostatic ability, washable in dishwasher

 Multi-attribute model : each attribute multiplied by how positively or negatively it affects us
(how positively affects me the weight of the bottle ? a lot? I don’t care?)
 Product = bundle of attributes

Example – cameras (Canon, Minolta, Nikon,..)

PHOTO

PRODUCTS LEVEL:

 Each product can have diff levels of discritpion

 1. Core product – what the product is meant to do (carry water and keep the temperature)
  Generi product – it does it for 8 hours, is it waterproof,
 Expected product – all the benefits for consumer (I expect the bottle to keep my tee warm
during the day / I can go to university in a comfortable jacket and not get wet, use this for my
travel so it must fit the suitcase,..)
 Augmented product – style, it harmonizes with my clothes, such a cool brand, above
functionality, prestige, exclusivity, additional factors, how does that make me feel (more
confident, cool) If it’s certain brands such as Gucci, it makes me feel special
 Potential product – potential direction for development in the future ( we can reduce the
weight, we can add this element to this). It’s from the company’s perspective

Opportunity identification /selection

 Research and compare the products, in which direction are going my competitors

NPD process: an overview

 Pre development: strategic orientation

o Analyse the market and the possibilitiers of the company to create, the customers
 Development
o How much are ppl willing to pay? Is the price adequate?
o Product development and testing
 Commercialization
o Market plan
o 4ps
o Positioning
o Globalization, how to promote in diff countries

Strategic orientation:

Why do we need to develop a new product?

Motivational conflict – ppl want 2 oppositve thing (pay lewss and quality high)

Approach --- approach – you want 2 things but you must choose 1

Approach --- Avoidance – you want to have sth desirable but you want to avoid negative
consequence (I want to eat chocolate but not gain weight)

Avoidance – Avoidance : choose between 2 undisirable things (either you keep using your old car but
repair it all the time or spend a lot on a new car)

Theory of cognitive dissonance

 Distressing mental state cause by inconstancy between a person’s……..

 Approach – avoidance (diet coke as a solution
 Avoidance – avoidance (renting a car can be a cheaper option)
 Approach – approach (customizable product – create my own shoues, bottle)

Approach Approach
  Show superiority of your alternative (very bad season for skyiing, you will enjoy beach much
better)
 Combination of both

Approach Avoidance

 I want a soda but I don’t want to gain weight (diet coke)

Avoidance – Avoidance

> Promote your product as a reasonable alternative (easy payment plan)

> Turn negative into positive: Buckely, Guiness,

1. ENVIRONMENT AND OPPORTINITY IDENTIFICATION

Pre-development stage
 Any company, there is the internal environments (employees, how many, which clients, the
culture, ) – you analyse the opportunities within the company
 Microenvironment : environment you can directly influence (suppliers, consumers,
competitors)
o PFF – what is the threat of new entrant (is it something easily copied or not?) –
bargaining power of suppliers (can suppliers dictate their price or can I choose and
dictate my rules) Bargaining power of buyers -> Threat of substitute of the
products (if ppl are not happy with my product can they easily swith to another
product ? Adidas – Rebook)

External, macro environment – politics, economic institution, purchase power of people,

demographics, is the population getting older? Younger?

PESTEL – context

 Are there some legal obstacle/support for this product?

SWOT Analysis .

 Strengths and weakness of our company

The perceptual map:

 In opportunity identification super impormant

 It helps you to position the company (and to know what consumers you should target)
 Before perceived as a very classical but wanted to be perceived as more modern

MEASURING PERCEPTIONS OF BRAND LUXURY:

 If you already know where you wna tto positions yourself, you should discuss …….?????

Basic strategy decision in Marketing

  Efficiency vs. effectiveness
 Lead vs Follow
 Attack vs defend
 Push vs pull
 Skim vs penetrate )differentiate vs low cost

opportunities and strategic goals:

 Instensive growt
 Market development – targeting new market – to who else can we sell this
o Cocme up with a new product for a specific, new market
 Diversificaition – brand extends linked to their productivity
o Walt diesny (movies, park) = concentric
o Porsche sunglasses (from cars to sunglasses) = pure
 Leader = you want to establish yourself as a leader, you must establish a trend before it
becomes mainstream
 Challenger = attack the leader (mistakes of a competitor)
o Attack a smaller company
 Follower = you follow the leader, and copy – imitate, adapt or clone
o Samsung imitated Apple
o Panasonic imitates Sony
 Nicher = find a niche staretgy, there is not much competition by default

Customer accepntance Goals:

 Use
 Satisfy
 Increase the market share

-.

Attractive opportunities:

 Deficiencies in existing products

 New technologies (fiber material that is strong and breathable)
 Strong bran equity

You have to generate the idea -> how it’s comparable with the resources of the company, and
evirnoment -> st

Concept selection
  85 diff ideas  we need to screen and filter the ideas, narrow them down  use metrics to
compare the selected ideas  concept testing
 How to narrow down?
o Exzternal decisions
o Product champion
o Intuition – “seems better”
o Multivoting
o Pros and cons
o Prototype and test )decision matrices – subjective, you score each idea based on
some criteria (perception of customers – will it be easy/diff tu use for customers
compared to competition)?
 Step 2 rate the concepts
 Step 3 Rank the concepts

Combine benefits of X’s idea and Y’s idea? Create a product XY

Concept scoring – precisely quantify the information on how better product X is compared to Y

Needs of custoemrs

 Explicit needs – customers easily articulate (I am not satisfied because of XXX)

 Latetent needs (diff to articulate )

Empathy – is walking in their shoes

To understand the needs people cannot aritucalte

Concept testing process

 Define selection criteria

 Determine survey population
 Measure consumer response – intention to buy, expected satisfaction, willingness to pay

Design is very important

 Based on customer experience?

Looks are not everything – it must have the correct functions

Design values

From and function – Adidas traniner

Form and Fuction –

Problem solving

Framing – Robot vacuum cleaner, you don’t need to do anything

Gartner Hype Cycle

 When an innovation is announced, everybody is excited about it – overinflated expectations

– disappointment – reaching stability
 Innovative idea – be ready that ppl will be overexcited and then a little disapoited

STEPS of NEW PRODUCT DEVELOPMENT -> general idea

- How can we find opportunities (consumers, analysing the environment in which we function,
perception maps, 4 approaches for design)
- Product levels

CASE STUDY:
Montreaux Chocolate USA

1. The positioning – a healthy chocolate or a flavourfull chocolate

a. Pakcging
2. Positioning – taste vs being a healthy cholocate
3. Introduce a product in the US important to know chocolate was predicted to grow until 2015
4. Most of the chocoloate is consumed by adults 54-64 – more likely to spend money on
cholocate boxes (gifts), ptremium high-end product
a. Women consume dark chocolate and see it as a reward
b. Men focus more on convenience (quick snack)
5. Possible perspective of a healthy chocolate – with fruit it’s even more healthy than just dark
chocolate. IT makes it healthier
6. Recommendation – brand recognition, packaging, positioning, how to launch it (test more do
a regional rollout or a national lauch)
a. Bran recognition